269. CHAPTER 3—CORPORATIONS: SPECIAL SITUATIONS Question MC #31A small corporation with unused minimum tax credits may use what percentage of regular tax as a minimum credit in 2011?a. 0.b. 25%.c. 50%.d. 75%.e. None of the above.270. CHAPTER 3—CORPORATIONS: SPECIAL SITUATIONS Question MC #32 Ford Corporation a calendar year corporation has alternative minimum taxable income (before any exemption) of $1.28 million for 2011. The company is not a small corporation. If the regular corporate tax is $211 050 Ford’s alternative minimum tax for 2011 is:a. $44 950.b. $209 000.c. $256 000.d. $1 280 000.e. None of the above.271. CHAPTER 3—CORPORATIONS: SPECIAL SITUATIONS Question MC #33 In 2011 Fay Corporation (a calendar year taxpayer) had the following transactions:Taxable income$4 000 000Mining exploration costs claimed1 000 000Percentage depletion claimed (the property had a zero adjusted basis)1 400 000Donation of stock held since 1988 as investment (basis of $100 000and fair market value of $400 000) to a qualified charity400 000For 2011 Fay Corporation’s AMTI is:a. $6 300 000.b. $7 150 000.c. $7 250 000.d. $7 300 000.e. None of the above.272. CHAPTER 3—CORPORATIONS: SPECIAL SITUATIONS Question MC #34 During 2011 Gold Corporation (a calendar year taxpayer) has $4 000 000 of taxable income and the following transactions:AMTI (not including adjusted current earnings)$5 000 000Adjusted current earnings8 000 000Gold Corporation’s alternative minimum tax (AMT) for 2011 is:a. $1 360 000.b. $700 000.c. $500 000.d. $90 000.e. None of the above.273. CHAPTER 3—CORPORATIONS: SPECIAL SITUATIONS Question MC #35 Ravi Corporation a calendar year taxpayer has AMTI (before adjustment for adjusted current earnings) of $6 million for 2011. If Ravi Corporation’s ACE is $15 million its tentative minimum tax for 2011 is:a. $2.02 million.b. $2.55 million.c. $3.45 million.d. $4.2 million.e. None of the above.274. CHAPTER 3—CORPORATIONS: SPECIAL SITUATIONS Question MC #36 Tanver Corporation a calendar year corporation has alternative minimum taxable income of $7 million in 2011 (before adjustment for adjusted current earnings). If Tanver’s adjusted current earnings is $16 million its tentative minimum tax for 2011 is:a. $310 000.b. $2 750 000.c. $6 750 000.d. $7 000 000.e. Some other amount.275. CHAPTER 3—CORPORATIONS: SPECIAL SITUATIONS Question MC #37 Which entity is subject to the ACE provisions?a. S corporation.b. Real estate investment trust (REITs).c. Regulated investment companies.d. Real estate mortgage investment conduits.e. None of the above.276. CHAPTER 3—CORPORATIONS: SPECIAL SITUATIONS Question MC #38 The exemption amount is phased out entirely when AMTI reaches:a. $40 000.b. $310 000.c. $1 000 000.d. $5 000 000.e. Some other amount.277. CHAPTER 3—CORPORATIONS: SPECIAL SITUATIONS Question MC #39 For purposes of the penalty tax on accumulated earnings under § 531 reasonable needs of the business does not include:a. Product liability losses.b. Self-insurance.c. Loans to suppliers and customers.d. Loans to shareholders.e. Plant expansion.278. CHAPTER 3—CORPORATIONS: SPECIAL SITUATIONS Question MC #40 Cave Corporation a calendar year taxpayer has a beginning balance in accumulated E & P of $3.5 million and current earnings of $1 million. If Cave can justify accumulations for the needs of the business of $3.7 million its accumulated earnings credit for ATI purposes is:a. $3.7 million.b. $250 000.c. $200 000.d. $0.e. None of the above.279. CHAPTER 3—CORPORATIONS: SPECIAL SITUATIONS Question MC #41 Maroon Corporation incurred the following taxes for the year 2011:Regular tax liability$187 000Tentative minimum tax156 000Personal holding company tax67 000Accumulated earnings tax65 400Maroon Corporation’s total tax liability is:a. $187 000.b. $254 000.c. $265 000.d. $421 000.e. Some other amount.280. CHAPTER 3—CORPORATIONS: SPECIAL SITUATIONS Question MC #42 What amount of accumulated earnings of a manufacturing corporation is considered within the reasonable needs of a business without the corporation having to show a bona fide business reason for the accumulation?a. $150 000 or less.b. $200 000 or less.c. $250 000 or less.d. $300 000 or less.e. None of the above.281. CHAPTER 3—CORPORATIONS: SPECIAL SITUATIONS Question MC #43 Blue Inc. a calendar year closely held corporation is not a PHC. If the company reports the following items the accumulated taxable income is:Taxable income$200 000Long-term capital gain (net of tax)18 300Federal income tax on LTCG11 700Dividends received deduction18 000Accumulated earnings credit80 000Federal income taxes65 150a. $54 550.b. $62 850.c. $80 850.d. $109 700.e. None of the above.282. CHAPTER 3—CORPORATIONS: SPECIAL SITUATIONS Question MC #44 Which of the following is alwayspersonal holding company income?a. Gas royalties.b. Rent income.c. Dividendsd. Personal service contract income.e. All of the above.
